May 11, 2006
Bayer launches new bond issues to replace a further part of the bridge financing
Loan syndication successfully completedLeverkusen, May 11, 2006 - Bayer AG has made further progress toward financing
its planned acquisition of Schering. Following the issuance of a mandatory convertible
bond on March 29, 2006, the company has now successfully syndicated a loan
representing one of the two credit facilities of EUR 7 billion each which have been
arranged with Credit Suisse and Citigroup to finance the transaction. The loan has
been syndicated to a small group of 11 banks (including Credit Suisse and Citigroup).
"We are especially pleased that all the banks we approached have participated in the
syndication," commented CFO Klaus Kühn.
Bayer's next step will be to launch bond issues on the European capital markets in
order to replace a further part of the bridge financing, the second of the two credit
facilities. It is intended to launch the bonds in three tranches, which will each be of
benchmark size: a three-year Eurobond issue with a floating interest rate; a seven-year
fixed-interest Eurobond issue; and a twelve-year fixed-interest sterling bond issue. All
these issues are to be launched under the recently updated EMTN program with a
minimum denomination of EUR 50,000 and GBP 50,000, respectively, and listed on
the Luxembourg Stock Exchange.
Bayer is taking this step in order to benefit from currently favorable market conditions
and at the same time broaden its investor base in Europe by way of its first sterling
bond issue. Issuance will take place in the near future, subject to market conditions,
and will be preceded by a three-day European road show beginning on Monday, May
15, 2006. "Within a short time we will thus have taken three major steps toward
completing the financing of the Schering acquisition," explained Kühn.